Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Krugerrand]

This warning is aimed further into the 2H of the year, rather than today. Though thanks for complying.
You may move about the cabin if necessary.
When seated, please be prepared for sudden acceleration at a moment's notice.

Ah, so the flight was canceled for today, and there’s going to be several future flight delays with tarmac sitting, and I can expect to lose my luggage - got it. SSDD

 

[2daMoon]

Ah, so the flight was canceled for today, and there’s going to be several future flight delays with tarmac sitting, and I can expect to lose my luggage - got it. SSDD

Ah, so you've flown with us before?

 

[LYTRIDR]

I don't think a single vehicle right now will qualify for the $7500 and imagine getting the $3750 earmarked for raw materials will be a massive challenge for manufacturers. And then we have this...

By December 31, 2023, a vehicle containing any battery components manufactured by a "foreign entity of concern" will not qualify period. ...

...This is extremely unfriendly to the current supply chain structure.

I couldn't agree more, and I think that is the point. Many people on this board and on Tesla Twitter have bemoaned the bill for being unnecessary in terms of the EV credit. Why would the government subsidize a product where supply already lags FAR behind demand? It is lunacy! Most headlines and articles on the credit mention the top line $7500 number but give little info on the critical mineral requirements and only a brief mention of the assembly requirements.

In reality, though the credit is not a credit for the EVs, though that is the point of entry for the cash. The real credit is for domestic miners, refiners, and processers of the critical minerals. It is for manufacturing of anode and cathode. In addition to some specific tax credits for the production of these minerals, the implied demand (for 10 years!!) will push companies to invest in the supply chain because their materials command a premium in the marketplace. It is a credit for USA and Friends(TM) supply chain and manufacturing.

This bill is designed to decouple the West's energy production from our geopolitical adversaries, primarily Russia and China. I am confident that now that incentives are in place, there will be an explosion of activity in these critical energy supply chain industries and many if not most EVs for sale will be available with the credits.

 

[Featsbeyond50]

Then why did they put income limits and a price cap on the tax credit? Both of which limit how many vehicles from the Big 3 will qualify?

The lifelines they have been thrown have the word HYBRID stamped on them.

 

[Fred42]

As for China, a Chinese automaker is free to set up shop in North America and qualify for the credit here.

Foreign investments in the US require approval from the federal govt, which given the political
climate might or might not be forthcoming.

 

[2daMoon]

The lifelines they have been thrown have the word HYBRID stamped on them.

When life gives you LEMONs (Limited Electrical Materials Of Necessity) you make Hybrids!

 

[AndrewZ]

I couldn't agree more, and I think that is the point. Many people on this board and on Tesla Twitter have bemoaned the bill for being unnecessary in terms of the EV credit. Why would the government subsidize a product where supply already lags FAR behind demand? It is lunacy! Most headlines and articles on the credit mention the top line $7500 number but give little info on the critical mineral requirements and only a brief mention of the assembly requirements.

In reality, though the credit is not a credit for the EVs, though that is the point of entry for the cash. The real credit is for domestic miners, refiners, and processers of the critical minerals. It is for manufacturing of anode and cathode. In addition to some specific tax credits for the production of these minerals, the implied demand (for 10 years!!) will push companies to invest in the supply chain because their materials command a premium in the marketplace. It is a credit for USA and Friends(TM) supply chain and manufacturing.

This bill is designed to decouple the West's energy production from our geopolitical adversaries, primarily Russia and China. I am confident that now that incentives are in place, there will be an explosion of activity in these critical energy supply chain industries and many if not most EVs for sale will be available with the credits.

The only parties I've seen talking about this in detail are a few of the best YouTubers and you need to dig to find them, even the talking heads on CNBC are glossing over details and the details matter very much here.

The Used EV credit is onerous on a different level too but I think that has been discussed here: $25k sale price limit, more conservative income limits, etc etc


I don't see any of this blowing up demand and it's not about that, it's about ensuring our own domestic energy security. These subsidies are to incentivize our own battery supply chain and help offset the additional costs that will accompany it.

 

[Featsbeyond50]

lotto tickets down the drain .... will give it till tomorrow
Only +ve is vol seems low .. so likely easy manipulation target .

Unexpected SP today, but Macro, Fed Thursday Jackson Hole meeting taking it's toll ...

I placed no bets but I'm shocked the share price isn't up today.

I've had the belief that FSD wouldn't move the share price until "The Market" starts to see the revenue potential. With the videos I saw this weekend, I think it's time for the market to start seeing it. I sent a video to my 87 year old father and he replied "it looks like a Tesla is in my future". He is very concerned about his ability to maintain mobility into his old age. I'm sure he's not alone.

And then there's robotaxi.

Are fanatics like us the only ones watching these videos?

 

[jw934]

 

[CorneliusXX]

Yes, we are obviously all guesstimating.

How many of those are in North America which realisticly is the only market where robotaxis have a significant likelyhood of existing within three years?

Can anyone really be confident that robotaxis will roam freely in London (and other European cities) within five years? Maybe, maybe not.

Based on what you paid I'm guessing your car is maybe three years old? If it takes five more years your car will be eight years old and you will have been out that money for as long while the amount would possibly have 10x already never mind what it does in the next five years if you bought shares instead. Also most people that bought a new car will have sold it within eight years.

It may well have been a much better idea to wait and pay £50k (or whatever) instead once the business case exist.

There will be plenty of cases for people in specific situations in specific locations where this could work out well of course. But so many here and in other media seems to think this is a sure thing to get rich from. It's anything but.

I'm not arguing with anyone that paid to support the development or feel that current abilities are worth it to them. Good for you and good for Tesla, actually, good for all of us. I'm just predicting that very quickly 99.9% of the miles driven by cars in Tesla fleet will be owned by Tesla or some large fleet investors, think Hertz putting a couple of 100,000 cars into the fleet.

The car is Mar-2022, ordered in Oct-21 when UK orders opened up.

Let's see how timing goes - I think there won't be as much of a time delay between getting the US working and the UK - the algorithm is the tricky part rather than the data, and the UK is becoming quite supportive of autonomous vehicles.

£6,800 bundled into finance is essentially a free hit for RT. £50k unfinanced is not.

I think it may well take quite a while for margins to compress substantially as they need to be high enough to support some non-driverless vehicles until there are enough driverless vehicles to sate demand.

 

[SOULPEDL]

Notoriously...

Wait a second... How did NHTSA not prevent this? Isn't there a roll-over test somewhere in there?
Grandfathered in maybe.

 

[scubastevo80]

I placed no bets but I'm shocked the share price isn't up today.

I've had the belief that FSD wouldn't move the share price until "The Market" starts to see the revenue potential. With the videos I saw this weekend, I think it's time for the market to start seeing it. I sent a video to my 87 year old father and he replied "it looks like a Tesla is in my future". He is very concerned about his ability to maintain mobility into his old age. I'm sure he's not alone.

And then there's robotaxi.

Are fanatics like us the only ones watching these videos?

While I certainly agree FSD is getting better (I have the beta), there comes a point where I'd struggle to pay so much money in reliance on a future regulatory approval. $15k is a ton of money to spend to sit in the driver seat and oversee the latest iteration of FSD. If I get t-boned 1 day after buying the car and FSD, that software "license" is gone. If FSD costs $30k by the time its ready for me to sit in the back seat, will anyone but taxi-like businesses even consider this?

I think the market outside of this board wants to see FSD revenues being booked come quarterly earnings updates. All of us know where this will eventually end up, but for the rest of the short sided analyst community, it's all about near term earnings and profit margins.

 

[thesmokingman]

Wait a second... How did NHTSA not prevent this? Isn't there a roll-over test somewhere in there?
Grandfathered in maybe.

They lobby against strict testing, like fwiw they test half ton cabs, but then use half ton cabs on HD trucks but don't test HD trucks (much heavier) with half ton cabs. I'm probably getting something wrong but that's the gist of it.

 

[Tronguy]

Reuters and WSJ are reporting today that Ford is cutting 3,000 salaried and contract jobs to help pay for its pivot to EV's. Ford is trading down about 5% but recovering with the chart pattern not looking much different to GM and others.

Ford confirms job cuts to pay for EV transition: WSJ

Aaannndd.. The chickens have come home to roost.

Failure of management to see past their collective noses, willfully or otherwise. They could have started investing in BEVs a decade or more ago. Tesla was reporting how they were doing; it wasn't made up, it wasn't a fraud, and the HQ building is nominally full of people who can read a balance sheet, evaluate a company, and see which way it could go.

Had anybody put two and two together, they could have then put money into the R&D budget. They could even have raised capital with stock. Or loans. Or cut back on dividends, in preparation for the on-coming storm. They could have arrived now with a smoother transition.

But, no: Ostrich style, they put their heads into the ground. Failure of management.

 

[Krugerrand]

Ah, so you've flown with us before?

Veteran. I’ve got one of those platinum, executive, gold medallion, titanium air miles membership cards.

 

[2daMoon]

For anyone coping with the notion of fear in their investment heart, I offer Sasha's brilliant diaplay of sarcasm along with sage wisdom to help comfort that nagging negative influence. Very well done. Should be shared widely.

 

[Ogre]

Wait a second... How did NHTSA not prevent this? Isn't there a roll-over test somewhere in there?
Grandfathered in maybe.

The NHTSA blew their budget researching the impact of fart noises on pedestrian safety.

Less critical things slip through the crack, but fart horns and ice-cream truck sounds will never again be the bane of innocent pedestrians.


PS: I'd love to see the comparison of deaths due to Autopilot versus due to crap like this and the twisted logic they use to spend so much time and effort chasing Tesla for a technology which has arguable saved many lives already.

 

[Krugerrand]

Well, if that isn’t the most organized, gentle, covering looking chart on the face of the planet?

Next person to claim the market is irrational gets a virtual throat punch.

 

[Nolimits]

Silly question. If I buy a share today although it’s past the split record date, so I still get the extra shares after the 25th? How does that work?

 

[Usain]

I don't think a single vehicle right now will qualify for the $7500 and imagine getting the $3750 earmarked for raw materials will be a massive challenge for manufacturers. And then we have this...

By December 31, 2023, a vehicle containing any battery components manufactured by a "foreign entity of concern" will not qualify period.

By December 31, 2024, a vehicle containing any critical minerals that were extracted, processed, or recycled by a "foreign entity of concern" will not qualify period.

Source and quote:

https://www.congress.gov/bill/117th-congress/house-bill/5376/text?q=%7B%22search%22%3A%5B%22inflation+reduction+act%22%2C%22inflation%22%2C%22reduction%22%2C%22act%22%5D%7D&r=1&s=1

This will disqualify vehicles with literally any battery components coming from China by the end of 2023 and any critical minerals from China by the end of 2024.


It would also apply to things coming out of Russia, North Korea, and other nations "covered" by them, but the EV battery supply chain relies massively on China right now and particularly when it comes to keeping the vehicles affordable.

This is extremely unfriendly to the current supply chain structure.

China itself is not a "foreign entity of concern". This is about terrorist nations and organizations, some of which are based in China. So as long as Tesla doesn't use those particular entities they will not be disqualified by that part of the law.